Business & Finance
FTC and 22 states sue Amazon over alleged advertising auction price manipulation
Regulators allege the company secretly charged advertisers inflated prices, while Amazon defends its practices and denies wrongdoing.
The short version
- The Federal Trade Commission and 22 state attorneys general sued Amazon, alleging it secretly manipulated digital ad auctions to overcharge advertisers.
- The suit claims Amazon altered standard second-price auction rules, causing over 1 million sellers to pay their maximum bid price about 80% of the time.
- Amazon denies the claims, asserting that average winning bids dropped by 50% between 2019 and 2025 and that advertisers saved billions through ad relevance systems.
- Plaintiffs are asking a federal court to halt the alleged scheme and order Amazon to pay financial penalties, restitution, and damages.
Key facts
- The FTC and 22 state attorneys general filed a lawsuit against Amazon in the U.S. District Court for the Western District of Washington.[CNBC]
- The lawsuit alleges Amazon charged winning bidders their full bid price roughly 80% of the time, despite telling advertisers it used standard second-price auctions where winners pay one cent more than the runner-up.[CBS News]
- Regulators allege the undisclosed surcharges were applied over seven years, impacting more than 1 million brands and sellers.[CBS News]
- Amazon called the lawsuit misguided, stating that average winning bids for sponsored product ads fell 50% between 2019 and 2025.[CBS News]
- Attorneys general from states including New York, California, Florida, and Texas are joining the FTC in seeking penalties, restitution, and court-ordered policy changes.[CBS News]